The Honorable Ortrie D. Smith, United States District

Judge for the Western District of Missouri, sitting by designation. The Honorable Thomas M. Shanahan, United States District Judge for the District of Nebraska. United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________ No. 96-2393

___________

Beryl Davey, on behalf of herself * and others similarly situated, * * Appellants, * * Appeal from the United v. * States District Court for * the District of Nebraska. City of Omaha, * * Appellee. *

___________ Submitted: December 11, 1996 Filed: February 24, 1997

___________ Before BOWMAN and HEANEY, Circuit Judges, and SMITH, Distric t * Judge.

___________

SMITH, District Judge.
Following a defendant’s verdict on Appellants’ claims under 42 U.S.C. § 1983, the District Court ruled for the defendant on 1Appellants have not appealed the jury verdict, nor have they

contested the District Court’s conclusion that the jury’s verdict foreclosed a favorable ruling on their disparate treatment claim. Appellants’ disparate impact and disparate treatment claims under Title VII. The present appeal involves only the District Court’s
ru lings with respect to the disparate impact claims. For th e 2 reasons set forth below, we affirm.

I. BACKGROUND
The Appellants are a class of 90 library employees employed by the Ci ty of Omaha, Nebraska (the “City”). For collectiv e bargaining purposes, City employees are represented by a var iety of statutorilycreated labor organizations; the Appellants ar e represented by the Civilian Management Professional and Technical Employ ee Council (“CMPTEC”). Contracts negotiated with CMPTE C typicallycover a three year span. In the event of an impasse , either the City or the bargaining unit may file a petition w ith the Comm issionof Industrial Relations (“CIR”), which has exclusiv e jurisdiction over wage dispute s involving Nebraska municipalities. Inresolving such disputes, the CIR “must establish rates of pa y and benefits which are compara ble to the prevalent wage rates paid to workers performing the same jobs with employers comparable t o Omaha.” Neb. Rev. Stat. § 48-818. The CIR has issued guidelines declaring that a city is compa rable to Omaha if it is no more than twic e as large as Omaha and no less than half the size of Omaha

. The CIR has also issued guidelines to aid in determining whetherThe class certified by the District Court consisted of all

library employees affected by the wage scales at issue in this suit. It should be noted that not all individuals holding the classification of Fiscal Specialist, Office Supervisor and Executive Secretary are library employees and hence are not included in the class. It should also be noted that all employees within these classifications were treated the same, regardless of whether they worked in the library or elsewhere. The parties and the District Court agreed that the Hay Study’s results were irrelevant to the disparate impact claim. Jt. App. at 2-3. However, as discussed later in this opinion, the reason the City commissioned and attempted to use the Hay Study is relevant to the issues presented on appeal.
3 jobs from other cities are properly comparable to jobs perfo rmed in Omaha. Al l positions are grouped into classifications. Th e classifications relevant to this suit are those related to th e City’s libraries; specifically, the classifications of Libra rian I, Librarian II, Librarian III, Library Specialist, Fiscal Spec ialist, Of fice Supervisor and Executive Secretary. Tr. at 76. In th e 3 past, the City had negotiated across-the-board wage increase s to be applied to all classifications represented by CMPTEC. However, in 1986 t he City desired to update its job descriptions, institut e performance appraisals and a merit pay system, and develop asalary str ucture with wages that insured fairness and equity both amon g City employees and with respec t to the outside market. Tr. at 54- 55, 61, 695; Jt. App. at 23. To this end, the City commissioned a stu dyto be performed by Hay Management Consultants (the “Ha y Study”). Negotiations for the 1989-91 contract began in 198 8. The Cityatt empted to use the Hay Study as a basis for negotiations , but its use was opposed by CMPTEC. Tr. at 915-16. The focal 4Although contested at trial, the accuracy of Otteman’s and

Troutman’s statistical methods and the conclusions drawn therefrom have not been presented as an issue on appeal.
4 point of these negotiations was benefits; wages were CMPTEC’ s secondary concern. Tr. at 445-46; 799-800. An impasse developed
over thi s issue, causing CMPTEC to file a petition with the CIR

. Tr. at 414-15, 430. In preparation for the hearing before the CIR, both the City and CMPTEC retained experts to conduct the wage study required by law and the CIR’s guidelines. The City hired Robert Otteman, and CMPTEC hired Gary Troutman. Dr. Otteman surveyed the cities o f Akron, Tulsa, Colorado Springs , Des Moines, Milwaukee, Kansas City (M issouri), Wichita and Lincoln, as well as Douglas Count y (Nebraska), the University of Nebraska Medical Center and th e State of Neb raska. Troutman studied the cities of Akron, Cincinnati , Colorado Springs, Denver, Des Moines, Kansas City (Missouri) , Milwau kee, and Toledo. Although the precise numbers vary, bot h experts agreed that many of CMPTEC’s members (and all members o f the class) were paid more than their counterparts in othe r localities. Faced with this finding from both experts, CMPTE C 5 feared an unfavorable decision from the CIR and withdrew it s petition. Tr. at 418-19, 421-22. As might be expected, the City was encouraged by the experts’ findings. As the end of 1989 drew near with no contract wit h CMPTEC, the City faced three options. The first option was to do nothing; if 1989 ended with no agreement, then the City would have had no obl igation to negotiate wages or benefits for that year. Tr. at 422, 812-13, 899. The second option was for the City to5

file its own petition before t he CIR with the expectation that the CIR would order wages decrease d for 1989. Tr. at 812-13, 899-900. The v iability of this option was based not only on the experts ’ reports, but also upon the fact that, with respect to a different bargainingunit (Local 251), the CIR had ordered a retroactiv e decrea se in wages. Tr. at 813, 823-24. The City’s final optio n was to continue attempts to ne gotiate a contract covering 1989-91. Tr. at 813, 900. Ultimately, the City chose to combine opti ons two and three. Tr. at 900-03. Th e City filed its petition before the CIRin late December 1989; however, an agreement with CMPTEC wa s still preferred because of the obvious advantages certainty for the ensuing two years would bring. In addition, the City really di d not de sire to enforce a retroactive wage decrease because o f concerns over fairness and morale; even when entitled to do so with respect to Local 251, the City negotiated an alternative that did not require the employees to actually pay money back to the City. Tr. at 823-24. In e arly January 1990, the City and CMPTEC resume d neg otiations. Instead of the across-the-board wage increas e instit utedin past years, the City (through its Labor Relation s Director, Thomas Marfisi) proposed a series of four grouping s, with dif ferent wage increases for the classifications within eac h groupi ng. Marfisi began by observing that, despite som e differences, Otteman’s and Troutman’s conclusions wer e substantially the same. Tr. at 854. Marfisi then used Otteman’s findings to group the classifications into four categories, based
on th e degree to which Otteman concluded those classification s
were underpaid or overpaid when compared to the midpoint of th e maximum salaries of the other employers surveyed. Specifically,6

Group I consisted of those classifications that were 8% or mor e above the maximum, Group II consisted of those classificatio ns that were less than 8% above the mi dpoint, Group III consisted of those classi fications that were between the midpoint and 7% below th e midpoint, and Group IV consisted of those classifications th at were more than 7% below the midpoint. The lines separating the groups
were determined by utilizing natural breaks in the percentages

. Tr. at 671, 814-16. All me mbers of the plaintiff class were among those withi n Group I; thus, though they received a wage increase for the years 1989- 91, they received a smaller increase than thos e classifications in the other three groups. However, the grouping proces s evidences a disparate impact on women: CMPTEC represent s 250 men and 103 women, while t he employees in Group I consisted of 79 men and 87 women. Ev entually, CMPTEC agreed to Marfisi’s proposal. In Jul y 199 0, and over strenuous objection from members of the plaintif f class, the City Council passed an ordinance approving th e groupings. The Appellants fil ed the instant suit in January 1992, alleging that passage of the ordinance violated their civil rights, constituted intentional discrimination, and resulted in a di sparate impact on women. The District Court concluded that the Civi l Rights Act of 1991 did not apply to this case, and therefore th e only claims submitted to the jury were those brought pursuan t to 42 U.S.C. § 1983. Following a jury verdict in the City’s favor, the District Court determined the jury’s verdict was binding wit h respec t to the intentional discrimination claim, but not th e disparate impact claim. After finding that the plaintiffs ha d demonstrated a disparate impac t on women, the District Court ruled7

inthe City’s favor because the City had demonstrated a viabl e business justification for its actions. This appeal followed.

II. DISCUSSION
A. Application of the Civil Rights Act of 1991

The first issue that must be addressed is Appellants’ clai m that the Civil Rights Act of 1991 (the “Act”) applies to thi s case. As this question is a legal issue involving statutory constr uction,
we mu st conduct a de novo review. Loehrer v. McDonnell Dougla s Corp. , 98 F.3d 1056, 1061 (8th Cir. 1996). Our independen t consi derationpersuades us that § 105 of the Act does not appl y retroactively. Section 105, which is codified at 42 U.S.C. § 2000e-k(1)(A), provides that An unlawful employment practice based on disparate impact is established . . . only if --

(I) a complaining party demonstrates that a respondent uses a particular employment practice tha t causes a disparate impact on the basis of . . . sex

. . . and the respondent fails to demonstrate that th e challe ngedpractice is job related for the position i n question and consistent with business necessity; or (ii) the complaining party [demonstrates] a n alternative employment practice and the responden t refuses to adopt such alternative employment practice.8

The Act was Congress’s response to a series of Supreme Cour t decisions; among the decisions specified by Congress was War ds Cove Packing Co. v. Atonio , 490 U.S . 642 (1989), and § 105 “is a direct response to Wards Cove .” Landgraf v. USI Film Products , 114 S. Ct. 1483, 1489 (1994). In Wards Cove , the Supreme Court held that a busine ss justification was a practice that “serves, in a significant way, the legitimate employment goals of the employer” and further directed that “the employer carries the burden o f producing evidence of a business justification for his employment practice [but that] the burden of persuasion . . . remains w ith the disparate-impact plaintiff.” Wards Cove , 490 U.S. at 659. In pas sing § 105, Congress intended to codify the standar d enunciat edby the Supreme Court in Griggs v. Duke Power Co. , 40 1 U.S. 424 ( 1971). Although this is not an appropriate case t o detail all the differences between Griggs and Wards Cove , it i s appr opriate to point out that there are significant difference s between the two.

Un der Wards Cove , after the plaintiff established a prim a facie case of disparate impact, the defendant employer bor e th e burden of producing evidence of a legitimate busines s jus tificationin defense of the challenged policy. Th e burden of p ersuasion, however, remained on the plaintiff. Under the Griggs standard, the burden is on the defendan t employer to prove both a "comp elling need" for the challenged policy, and the lack of an effective alternative policy that would not produce a similar disparate impact.

Bradl eyv. Pizzaco of Nebraska, Inc. , 7 F.3d 795, 797 (8th Cir

. 1993); see also Houghton v. Sipco, Inc. , 38 F.3d 953, 958 (8 th Cir. 1994).9

We must begin by examining the language of the Act itsel f while keeping in mind that “there is no special reason to thin k that all the diverse provisions of the Act must be treate d unifor mlyfor such purposes.” Landgraf , 114 S. Ct. at 1505. I n presenting their text-based argument, Appellants rely upon § 402 of the Act, which provides as follows: (a) Except as otherwise specifically provided, this Act and the amendments made by this Act shall take effect upo n enactment. (b) Notwithstanding any other provision of this Act, nothing in this Act shall apply to any disparate impact case for whi ch a complaint was filed before March 1, 1975, and for which an initial decision was rendered after October 30, 1983. It seems clear that § 402(b) d escribes one case and one case only; namely, Wards Cove

. See Landg raf , 114 S. Ct. at 1493. Appellants
con tendthat by specifically exempting Wards Cove from the Act’ s application, and by declaring that, except as provided, the Act was to take effect upon enactment, the Act must apply to all othe r
cases -- including this one. The major flaw in this argument i s that the Supreme Court has explicitly rejected it -- twice. Id . at 1494-96; Rivers v. Roadway Exp ress, Inc. , 114 S. Ct. 1510, 1514-15 (1994)

. In rejecting this analysis with respect to § 102 of th e Act, the Landgraf Court noted that “[h]ad Congress wished § 402(a) to have such a determinate meaning, it surely would have use d language comparable to its reference to the predecessor Title VII damages provision in the 1990 legislation: that the new provisions shall apply to all proceedings pending on or commenced after th e date of enactment of this Act,” 114 S. Ct. at 1494 (citation" In 1990, a comprehensive civil rights bill passed both

Houses of Congress. Although similar to the 1991 Act in many other respects, the 1990 bill differed in that it contained language expressly calling for application of many of its provisions, including the section providing for damages in cases of intentional employment discrimination, to cases arising before its (expected) enactment. The President vetoed the 1990 legislation, however, citing the bill's ‘unfair retroactivity rules’ as one reason for his disapproval.” Landgraf , 114 S. Ct. at 1491-92 (footnote omitted).
10 omitted). The Rivers Court, when presented wi th the same argument

6 withrespect to retroactive application of § 101, noted that th e argument “is no more persuasive as to the application of § 101 to preenactment conduct than as to that of § 102.” 114 S. Ct. a t 1514. The abov e reasoning applies with equal force to § 105. Ha d Congress intended for § 105 to apply retroactively, it would have said so clearly and directly: just like it did in Title VII. Given the important considerations involved in deciding to apply a statut e retroactively, we do not believe Congress would hav e employ edsuch tortured language to achieve this result. Se e Landgraf , 114 S. Ct. at 1495. Appellants acknowledge Landgraf ’s holding, but contend i t sh ouldnot apply in this case because it would render § 402(b )
me aningless. However, as Landgraf explains, “[i]t is entirel y possible -- indeed, highly pro bable -- that, because it was unable to resolve the retroactivity issue with the clarity of the 199 0 legislation, Congress viewed the mater as an open issue to b e resolvedby the Courts. . . . The only matters Congress did no t leave to the courts were set o ut with specificity in §§ 109(c) and 402(b).” Landgraf , 114 S. Ct. at 1494-95 (emphasis in original).11

Reject ing Appellants’ argument does not render § 402(b ) meaningless. Ha vingconcluded that Congress did not specifically declar e that the Act is to apply retroactively, “we must consider whether the new statute would have a true retroactive effect, i.e. , < whethe r it would impair rights a party possessed when he acted, increase a par ty’s liability for past conduct, or impose new duties wit h respect to transactions already completed.’” Maitland v. Uni versity of Minnesota , 43 F.3d 357, 361 (8th Cir. 1994) (quoting Landgraf , 114 S. Ct . at 1505) (footnote omitted). A statute is no t
re troactive merely because it applies to conduct that occurre d pr ior to the statute’s enactment; “[t]he conclusion that a particular rule operates < retroactively’ comes at the end of a process of judgment concerningthe nature and extent of the change in the l aw and the degree of connection between the operation o f the new rule and a relevant past event.” Landgraf , 114 S. Ct. at 1499. Given the broad effect of § 105, it cannot be characterized
as simply a procedural change. Generally speaking, § 10 5 reallocates and raises the burden of persuasion with respect to a business justification defense and redefines precisely wha t constitutes a valid business j ustification. It seems clear, then, that application of § 105 would attach new legal consequences t o emplo yment decisions made prior to its enactment, renderin g impe rmissible certain acts that were previously permissible an d gi vingemployers different issues to consider when makin g decisions. We have no difficulty concluding that § 105 attache s new consequences to prior conduct and significantly alters theAs an alternative argument, Appellants contend that the

City’s violation was continuing in nature, thereby permitting retroactive application of § 105 under the facts of this case. We disagree for two reasons. “We are not familiar with any Eighth Circuit law where the concept of continuing violation, ordinarily associated with statutes of limitations issues, has been employed to overcome a non-retroactivity rule.” Caviness v. Nucor-Yamato Steel Co. , No. 95-3482, slip op. at 8 n.1 (8th Cir. Jan. 29, 1997). We went on to opine that applying the continuing violation doctrine in this manner would violate Landgraf

. Id

. We are now bound by our decision in Caviness

. 12 legal terrain that employers must traverse. Consequently, we hold that § 105 does not apply retroactively. 7
B. Disparate Impact Analysis

Th e employment decision attacked by the Appellants is th e City’s decision to place all classifications within the fou r groupings; Appellants have specifically declared that this, not the decisions regarding the amount of raise to award on an annua l basis, is the practice they challenge. The District Court foun d that the groupings had a disparate impact on women, and the Cit y has not appealed that determination. Once a plaintiff has demonstra ted that an employment practice ha s a disparate impact, the employer is called upon to offer a busine ss justification for the practice. “This phase of th e disparate-impact case contains two components: first, a consideration of the justifica tions an employer offers for his use of t hese practices; and second, the availability of alternativ e pr actices to achieve the same business ends, with les s [discriminatory] impact.” Wards Cove , 490 U.S. at 658. A validAppellants suggest that the issue of business justification

is a mixed issue of law and fact and is subject to a de novo review. We disagree. Wards Cove suggests that the employer must “persuade the trier of fact” to succeed with the defense, Wards Cove , 490 U.S. at 660, and we have previously treated the issue as one of fact. Bradley , 7 F.3d at 798; see also Melendez v. Illinois Bell Tele. Co. , 79 F.3d 661, 670 (7th Cir. 1996).
13 business justification describ es a business practice that “serves, in a s ignificant way, the legitimate employment goals of th e employer.” Id . At 659. An insubstantial justification will no t suffice, but an employer need not demonstrate that the practice is essential or indispensable. Id . Even if the employer ca n demonstrate a valid business justification, the plaintiff st ill has the op portunity to persuade the fact finder that alternativ e prac tices would have equally satisfied the employer’s interest s without creating a disparate impact. “Of course, any alternative practi ces which respondents offer up in this respect must b e equallyeffective as [the employer’s] chosen . . . procedures i n achieving [their] legitimate goals.” Id . at 661. In determining whethe r proffered alternatives are equally effective, the fac t finder may consider factors such as efficiency, cost, or othe r burdens associated with the alternative. Id

. Our re view of the record demonstrates that the Distric t Cou rt’s findings were not clearly erroneous. The District Cour t 8 found that the City’s goal was to create a fair and equitabl e manner for implementing wage i ncreases for CMPTEC’s members. This purpose was described in other portions of the record as a desire to reach a fair and equi table settlement with the union. Appellants do not deny that this is a valid business justifi cation, but rather claim that adoption of the groupings was not motivated14

by this goal. Appellants contend that the evidence demonstrate s that the City’s goal was simply to negotiate a contract, but th e recordbelies this contention. The City had no obligation t o negotiat e 1989's wages, and were in a good position to present a
succe ssful petition to the CIR. As things turned out, the Cit y desiredto negotiate a contract for 1989-91 if possible, but th e
re corddoes not demonstrate this to be the sole reason for th e grouping s that were eventually adopted. As far back as 1986 th e City was interested in insuring equity in pay, with equity m easured not only internally but also in comparison to what other citie s
were paying their employees. This is why the Hay Study wa s commissioned, and this is why the City tried to use the Hay Study duringthe initial round of negotiations. The testimony of To m Marfis i describing his reasons for making the proposal that wa s eventually adopted more than adequately supports the Distric t Cour t’s findings that the groupings were adopted to promot e fairness and equity. Appellants also attack the District Court’s finding that the eviden ce supported the groupings that were adopted and that th e groupings promoted the interest of fairness and equity. Rel ying on Chr istensenv. Iowa , 563 F.2d 353 (8th Cir. 1977), Appellant s contend the studies conducted by Otteman and Troutman were flawed because they examined wages in an artificial market defined by Nebraska statutes and CIR regulations as opposed to wages in th e market in which Omaha competes for library employees. Christensen does suggest that wage decisions may be based upon the reali ties of the m arket in which the employer must compete for workers. 56 3 F.2d at 354, 356. However, we disagree with Appellants’ con tention that the City’s decision was based on studies of irrelevant15

markets. We do not base this decision on the simple fact that the decision was based on analysis of the markets described in N ebraska sta tutes and CIR regulations, but rather because evidence in th e record supports the conclusionthat the markets studied by Otteman and Troutman are, in fact, the markets that Omaha competes in when hiring library employees. Tr. at 543-44, 564-66, 585, 717-1 8, 730- 31. Finally, Appellants dispute the District Court’s declaration that they failed to introduce evidence demonstrating the existence of a viable alternative. Appellants concede that they did no t address this issue in their post-trial brief, but contend th at they nonetheless presented evidence of three viable alternatives

. Howeve r, Appellants were not merely silent in their post-tria l brief; Appellants advised the District Court that “an alternative option is not relevant in this case because no business necessity has been demonstrated by Defendant.” Davey v. City of Omaha , No. 8:CV92-00046, slip op. at 23 (D. Neb. Apr. 15, 1996) (quotatio n omitte d). By telling the District Court that it did not need t o disc uss alternative options, Appellants abandoned the issue an d cannot raise it on appeal. Kr amer v. Kemna , 21 F.3d 305, 308 (8th Cir. 1994) (“Failure to give the district court a first oppo rtunity to decid[e] the merits of an a rgument constitutes a waiver of that argument.”). Even i f Appellants had properly presented the issue to th e District Court for considerati on, we do not believe the outcome of this case would be different. The first alternative, an acr oss the board increase equally applied to all CMPTEC members, is not viable within t he meaning of Wards Cove because it does not promote th e City’s goal of moving wages closer to those paid in comparable16

cities. The second alternativ e, implementation of the Hay Study’s recommendations, is curious in light of testimony from one of the Plaintiffs that the recommenda tions would have an “adverse impact”
on libra ry employees. Tr. at 82. Furthermore, although the Ha y Stu dydid conclude that there was less “internal equity” wit h respec t to library positions, the Hay Study reached the sam e conclusion as did Otteman and Troutman in concluding that library emp loyees were paid above employees with similar duties in othe r cities. Tr. at 711. Appellant has not pointed to any portion of the record that demonstrates that the Hay Study would have b oth (1) hada less disparate impact and (2) equally satisfied the City’ s goals when compared to the pla n that was adopted. Cf

. Wards Cove , 490 U.S. at 660 (burden of per suasion with respect to viability of alternatives rests with plaintiff). Finally, Appellant s surrenderedthe opportunity to rely on the Hay Study when the y represented to the District Court that “the Hay Study is irr elevant to Plaintiffs’ disparate impact claim and . . . that the pla intiffs [sic] have never claimed that the Hay Study supports [the di sparate impact] part of their case.” Jt. App. at 3. Appellants’ third and final su ggested alternative was for the Cityto divide the groupings in different manners or utilize a diff erent number of groupings. The record demonstrates th e groupings were made by listing the various job classifications in order of the degree to which their wages were over or above th e average median wages from other cities, and the lines were d rawn in natu ral breaks in those percentages. Appellants speculate tha t alt ernative groupings would have been as or more effective a t achieving the City’s goal of e xternal equity; however, as with the other proffered alternatives, they have failed to identify any17

evidence demonstrating that equally viable alternatives would have been equally effective in achieving the City’s goals.

III. CONCLUSION
For the foregoing reasons, the judgment in favor of the City is AFFIRMED.
HEANEY, Circuit Judge, concurring and dissenting. I concur in Section B of the majority’s opinion for th e reasons stated therein. I disagree, however, with the majority’s conclusion that Section 105 of the Civil Rights Act of 1991 is not
re troactive. Assuming retroactivity, I nonetheless believe tha t the librarians’ claim under the Civil Rights Act fails for t he same reasons they did not succeed under Section 1983.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.